Sometimes I’m surprised at how much the IRS knows about my clients (of course, sometimes I think nothing can surprise me anymore). In any event, keep in mind that the IRS has access to your credit report through Equifax, TransUnion, and Experian. That probably comes as no surprise to any of you; however, there are many, many other agencies not as well known that gather data about consumers. For example, there are agencies that gather data on insurance claims, medical payments and records, your residential history, and so forth and then sell that information to third parties.
The Consumer Financial Protection Bureau has a list of about 40 agencies at http://files.consumerfinance.gov\f\. I wouldn’t recommend spending a lot of time pursuing all of the reports of these agencies, but it is worth knowing that each of them has an obligation to provide a consumer with a copy of their report. For example, here is another one: There is something called a Lexis Nexis Comprehensive Loss Underwriting Exchange Property Report. This includes your claims history with respect to property. This is typically used by many insurance companies to determine your premiums. There are also employment history reports. Again, usually used by prospective employers with your permission, but I often wonder if this isn’t accessible to the IRS. There are other agencies that keep track of a renter’s history, something landlords typically use.
I recently had a conversation with a revenue officer who surprised me by complaining that my client is often playing in poker tournaments. I asked him how he knew that, and he said, “I just Googled it.” Apparently, a lot of big poker tournaments which are now popular list the folks who pay to enter into the tournament.
This is not in any way a comprehensive list; it’s just something to keep in mind. When you’re dealing with the IRS, keep in mind that, in my experience, if the agent you’re dealing with feels you are being up front with him you are more likely to get a fair shake from that agent.